Northport Power Station

Long Island Power Authority has won the latest battle against the Town of Huntington in the lengthy legal war over Northport Power Station’s value.

New York State Supreme Court’s Appellate Division has reinstated LIPA’s right to pursue a lawsuit against the Town of Huntington regarding the amount of taxes levied against the Northport power plant, reversing a September 2015 decision made by a lower court. A panel of judges ruled Aug. 8 LIPA does have legal standing to be a plaintiff in the 2010 lawsuit it filed jointly with National Grid.

“We believe the appellate court’s decision is correct.”

— Sid Nathan

“We believe the appellate court’s decision is correct,” LIPA spokesman Sid Nathan said. “We remain committed to reaching a fair settlement for both the local communities and our 1.1 million customers to put an unsustainable tax situation back on a sustainable path.”

In September 2015, state Supreme Court Justice John Bivona issued a decision dismissing LIPA’s standing as an initiating plaintiff in the tax certiorari case, since National Grid — and not LIPA — is the owner of the plant. Bivona had written that while LIPA believed its financial interests are adversely impacted by a wrongly overstated assessment of the power plant, “the result is still remote and consequential and certainly does not constitute a direct loss because the property taxes levied upon the Northport Power Station are actually and directly paid by National Grid Generation LLC.”

LIPA filed an appeal of Bivona’s decision in 2015. The utility has asserted while National Grid does own the power plant, the station is under contract with LIPA. Under the contract, LIPA is required to pay all costs to run the power plant — including the $80 million in annual property taxes to the Town of Huntington — and provide necessary fuel, for which in return it receives all electricity generated for its customers.

The utility company claims that its costs to operate the Northport Power Station including the taxes on it exceed the total revenue, resulting in LIPA referring to it as a “significant burden to LIPA’s customers.”

“We’re reviewing the order from the appellate division and we’re considering an appeal.”

— Nicholas Ciappetta

With LIPA’s legal status reinstated as a party of interest on the tax certiorari case, the issue of the property tax-assessed value of the power plant could proceed to trial.

However, Huntington Town Attorney Nicholas Ciappetta has said he plans to carefully review the appellate court’s decision.

“We believe this has been wrongly decisioned,” Ciappetta said in a statement. “We’re reviewing the order from the appellate division and we’re considering an appeal.”

This latest legal decision comes less than a month after Huntington voted July 17 to hire a neutral third-party mediator, Marty Scheinman, in an attempt to reach a resolution with LIPA, National Grid and Northport-East Northport school district. The town agreed to pay Scheinman $1,150 an hour in addition to covering all out-of-pocket expenses, such as transportation and a one-time administrative fee, the total bill will be split among all parties in the mediation.

Mediation has not yet started, but the first session is slated for Sept. 26, according to Chiappetta.

Update: Additional information was added to further clarify that the town will be splitting the costs of the third-party mediator.

Mediation meetings could begin in next 30 days in attempt to reach settlement in lawsuit before fall trial date

Town of Huntington and Northport school officials have agreed to sit down with Long Island Power Authority to see if an agreement can be reached, before the lawsuits go to trial.

The town board voted July 17 to hire a neutral third party in an attempt to resolve its differences over the assessed property tax value of the Northport Power Station with LIPA and National Grid that have led to a lengthy, ongoing battle.

“The judge was very adamant about making sure we sat down and went through this,” Cook said. “Why don’t we put all the cards on the table and see what we find. I’m all for it.”

Scheinman has been a full-time arbitrator for more than 40 years and has helped parties reach an agreeable resolution in more than 20,000 private and public-sector disputes, according to his website. He has experience dealing with high-profile celebrities, elected officials and helped resolve the largest commercial dispute in the history of the New York state court system between the co-founders of AriZona Beverages, according to Supervisor Chad Lupinacci (R).

“This is just about getting everyone to the table,” Lupinacci said, who has consistently said the town remains open to negotiations.

Now, Scheinman faces the daunting task of finding common ground between LIPA, which filed a tax certiorari lawsuit against the town assessor’s office in 2010 seeking a 90 percent reduction in the assessed property tax valuation of its Northport Power Station, and seeking repayment of all taxes it claims to have overpaid since 2010 — currently amounting to more than $550 million and growing — and the Huntington and Northport communities it would affect.

“I’m glad to have been selected and hope I can help the parties resolve their dispute,” Scheinman said.

Councilman Mark Cuthbertson (D) voted against taking up Cook’s suggestion, before ultimately abstaining from voting on the contract to hire an arbitrator. Cuthbertson said while he commended a move toward mediating the dispute, but questioned Scheinman’s relatable experience.

“This particular litigation is a specialized litigation involving complex tax certiorari formulas for assessing power plants,” he said. “As far as I can see this mediator’s experience is really with labor and employment relations, so I have concern with this mediator’s background and choice.”

Under the approved contract, the town has agreed to pay Scheinman $1,150 per hour in addition to covering all out-of-pocket expenses, such as transportation, plus a one-time $400 administrative fee. The overall bill will be evenly split between the town, LIPA, National Grid and Northport-East Northport school district, whose trustees unanimously agreed to move forward with mediation July 11.

Huntington’s town board change in approach to its lawsuit with LIPA comes shortly after the court trial was originally slated to begin, June 11, which had been postponed. All parties were scheduled to appear July 18 in Suffolk County Supreme Court before Judge Elizabeth Emerson at 10 a.m. to present their arguments on motions already made on the case. The outcome was not available by this publication’s press time.

In early June, Cook had asked his fellow board members to hire Manhattan-based law firm Boise Schiller & Flexner LLP as additional legal counsel in the town’s pending tax certiorari case with LIPA and National Grid to aid current outside legal counsel, Lewis & Greer P.C. The measure was shot down by a 3-2 vote with Lupinacci, Cuthbertson and Councilwoman Joan Cergol (D) standing against it. One of Cuthbertson’s key reasons for standing against it was the cost, as under the contract the town would have paid Boise Schiller & Flexner $1,650 an hour.

Cook has also previously publicly spoken out about looking into the possibilities of using eminent domain for the town to take possession of the Northport power plant. He never brought the option before the board.

Mediation meetings between all four parties would likely begin within the next 30 days, according to Cook.

Both the Town of Brookhaven and Village of Port Jefferson announced they were nearing settlements over the tax-assessed value of the Port Jeff plant with LIPA in early April.

Suffolk County Police Marine Bureau officers rescued three men after their canoe overturned in the Long Island Sound in Northport Friday.

An employee of PSEG’s Northport Power Station observed three males in the Long Island Sound hanging onto their canoe that had overturned approximately 300 yards off shore July 6, according to police. The individual called Suffolk County Police Marine Bureau directly and Officers Paul Carnival, Keith Walters and John Falcone responded at approximately 2:50 p.m.

The officers arrived approximately three minutes later and assisted Javier Villatoro, 27, of Brentwood, his brother Jose Villatoro, 25, of Central Islip and Odir Vilorio, 30, of Huntington Station, onto Marine Bravo. Villatoro was the only person wearing a life jacket.

The men and their canoe were transported to the Soundview boat ramp in Northport. The men refused medical attention.

Northport school district residents read and fill out letters to state and federal elected officials. Photo by Sara-Megan Walsh

By Sara-Megan Walsh

Northport-East Northport school officials are asking their residents to call on elected officials for immediate help finding a resolution to their seven-year legal battle against Long Island Power Authority.

Northport school district held a call-to-action forum May 30 in which it asked all residents to reach out to their state and federally elected officials to take action in bringing about a solution to the district’s lawsuit against LIPA and National Grid as a June court date looms.

“Our elected officials really need to hear from us,” Superintendent Robert Banzer said. “The more voluminous, the louder, the more persistent we are the more likely they are to listen.”

“The more voluminous, the louder, the more persistent we are the more likely they are to listen.”– Robert Banzer

Hundreds of copies of a form letter addressed to elected officials including New York State Gov. Andrew Cuomo (D), state Sens. John Flanagan (R-East Northport) and Carl Marcellino (R-Syosset), and state
Assemblyman Andrew Raia (R-East Northport) were distributed for residents to sign and mail in to lawmakers. These letters call on elected officials to take action to help aid the school district stave off LIPA, which seeks a 90 percent reduction in taxes — a difference of approximately $56 million down to $8 million paid to the district — before the state Legislature’s sessions end June 20.

“LIPA must be stopped before it is too late,” reads a letter pre-addressed to Raia. “We are seeking your assistance in calling upon the governor to provide immediate assistance in Albany. Action by the governor’s office can stop the imminent harm to us as taxpayers, to our schools, our students and the community at large.”

As the June 11 court date rapidly approaches, Banzer and the Northport school district are pushing state officials to approve what they are putting forth as two possible solutions.

First, would be the passage of pending legislation of state Senate Bill No. S08235, sponsored by Flanagan with co-sponsor state Sen. Ken LaValle (R-Port Jefferson), and its corresponding state Assembly Bill No. A10496, which is co-sponsored by Raia. These bills would lengthen the time frame over which LIPA is seeking to have its taxes gradually reduced from nine years to a proposed 15 years. It would also grant those municipal governments and school districts who lost a tax assessment challenge to LIPA after April 1, 2018, access to the state’s electric generating facility cessation mitigation program, which provides funding to help offset any potential loss of tax revenue. In addition, the town government and schools would be granted the right to create reserve funds specifically for the purpose of reducing the future burden on their taxpayers.

“It would provide some mitigation of the impact to us,” Banzer said. This would provide a glide path, it would provide a somewhat softer landing should there be a [change in] assessment.”

Northport school officials are also asking residents to directly call on Cuomo and the state Legislature to intervene by directing that LIPA, as a utility company overseen by a state-appointed board, to offer a “reasonable and equitable” settlement offer.

While previous settlements have been declined, Banzer made clear, “we would never say we wouldn’t sit down and have conversation on how to mitigate this.”

On May 9, Northport school district attorney John Gross presented his argument in Suffolk County Supreme Court as to why he believes LIPA should be held to what school officials are calling the “1997 Promise.” Under this promise, school officials allege, LIPA and National Grid agreed not to challenge the annual taxes paid on the Northport Power Station as long as they were not abusively increased over time by Town of Huntington. A decision has not yet been issued by Judge Elizabeth Emerson, despite the June 11 trial date approaching.

“We need to continue to put pressure on [Huntington town officials] to speak for us on behalf of the community.”– Jennifer Thompson

“I think the community needs to communicate with town leadership,” Northport resident Jennifer Thompson said, citing the years Huntington Supervisor Chad Lupinacci (R) served in the state Assembly. “We need to continue to put pressure on them to speak for us on behalf of the community.”

Councilman Gene Cook (R) said he would call for Huntington Town Board to hold a public hearing regarding using eminent domain to acquire the Northport Power Station.

“LIPA has been lying to us,” Cook said.

The councilman claims that LIPA’s assessed value of $193 million for the Northport power plant focuses only on the electricity produced, but does not account for gas lines, cable transmissions or other public utilities that are received from the power station.

“I’m going to fight this,” he said. “I’m going to fight this to the end and I want you to know that.”

Northport taxpayers who are interested in getting in contact with their elected officials or reading the form letters provided at the May 30 meeting can find them on the district’ website at northport.k12.ny.us/
district/lipa_update.